November 2019, articule published originally in HarvardD
What they won’t tell you about digital transformation (and should keep you awake at night)
Digital transformation (DT) is a fashionable concept in the business world. Of the two words, management is obsessed with the term “digital” when the future of companies lies in the term “transformation.” What are the key success factors shared by companies that are managing to achieve transformation? What mistakes are made by the ones that fall behind?
A high-power meeting, 750 participants, all employees of the company, essentially board members and intermediate managers. They are loaded with equipment: Laser lights, high voltage, and screens make up a stage suited to a world-class DJ, like David Getta. It’s my turn. I go up. I come out. Nerves (I’m always nervous before a speech). I share my ideas about the impact of digital transformation on companies. At the end of my session, the vice president of the company (the number 2) is up. He takes the stage and proudly announces the investment of millions of dollars in a new management software. It’s the big bet of the company for transforming the business – he says. By my side is the CEO. I ask him, whispering in his ear: How much have you invested in the professionals? He looks at me surprised and remains quiet. He doesn’t open his mouth. The answer is clear. Zero. That is, mega investment in digitalization and mini investment in employees and managers. The question that immediately comes to my mind for him is: Does a tool change an organization? I mean, deeply change it…
Because there is a difference between digitalizing and transforming digitally. The first is giving digital tools to an organization. The second implies working and, therefore, doing business in a different way. After having interviewed in depth dozens of executives, board members as well as general managers of mostly large or very large companies in diverse sectors (besides hundreds of informal conversations with managers, employees, business owners), I have the answer: No. Technology (alone) doesn’t transform an organization and the way of doing business. Companies are changed by the people working for the organization. In fact, they are the ones who must put the tools to use. I don’t mean to minimize the value of different technologies (IoT, virtual reality, AI, blockchain, …) They are fundamental, even a necessary condition (probably secondary, after certain elements I’ll develop in the next lines), although not enough.